Maine Hospitality Market Review & 2018 Forecast

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1 Maine Hospitality Market Review & 2018 Forecast Steve Hewins 45 Melville Street Augusta, ME Nicholas Farrell Middle Street Portland, ME

2 Welcome & Today s Agenda 2017 Review National & Regional Lodging Statistics Maine Lodging at a glance Trends Current Trends & Hot Topics 2018 Trends Market snapshots Significant Transactions Development Pipeline 2018 Forecast

3 National Lodging Statistics

4 U.S. Occupancy % 64% 62% 60% 58% 56% 54% 52% 50% (P) 2018 (F) U.S 62.8% 59.8% 54.6% 57.6% 60.0% 61.4% 62.3% 64.4% 65.4% 65.5% 65.7% 65.6% Source: Smith Travel Research; Pricewaterhouse Coopers.

5 U.S. Average Daily Rate (ADR) $130 $125 $120 $115 $110 $105 $100 $95 $ (P) 2018 (F) U.S $ $ $98.17 $98.04 $ $ $ $ $ $ $ $ Source: Smith Travel Research; Pricewaterhouse Coopers.

6 U.S. Revenue Per Available Room (RevPAR) $90 $85 $80 $75 $70 $65 $60 $55 $ (P) 2018 (F) U.S $65.55 $64.25 $53.55 $56.46 $61.05 $65.11 $68.48 $74.13 $78.68 $81.19 $83.23 $85.06 Source: Smith Travel Research; Pricewaterhouse Coopers.

7 Maine Lodging Statistics

8 Maine Occupancy % 65% 60% 55% 50% 45% 40% (P) 2018 (F) Maine 62.4% 58.8% 53.3% 55.6% 56.4% 56.8% 57.1% 56.7% 56.8% 59.2% 60.0% 60.2% U.S. 62.8% 59.8% 54.6% 57.6% 60.0% 61.4% 62.3% 64.4% 65.4% 65.5% 65.7% 65.6% Sources: Smith Travel Research; PwC

9 Maine ADR $130 $125 $120 $115 $110 $105 $100 $95 $90 $ (P) 2018 (F) Maine $92.63 $94.93 $92.33 $95.81 $ $ $ $ $ $ $ $ U.S. $ $ $98.17 $98.04 $ $ $ $ $ $ $ $ Sources: Smith Travel Research; PwC

10 Maine RevPAR $85 $80 $75 $70 $65 $60 $55 $50 $ (P) 2018 (F) Maine $57.80 $55.82 $49.24 $53.27 $56.74 $58.46 $62.64 $65.93 $67.88 $73.84 $77.50 $79.50 U.S. $65.55 $64.25 $53.55 $56.46 $61.05 $65.11 $68.48 $74.13 $78.68 $81.19 $83.23 $85.06 Sources: Smith Travel Research; PwC

11 Maine Summer 2017 (May August) Summer Visitors % Change Total Estimated Visitors 25,067,053 26,187, % Overnight Visitors 9,598,991 10,403, % Day Visitors 15,468,062 15,784, % Destination of overnight visitors 27% 25% 25% 16% 16% 16% 13% 13% 11% 11% 14% 15% 12% 11% 12% 12% 10% 11% 4% 6% 6% 2% 3% 4% Maine Beaches Downeast & Acadia Maine Lakes & Mountains Maine Highlands Mid Coast Greater Portland Kennebec & Moose River Valley Aroostook County Source: Digital Research Group

12 Maine Winter 2017 (Dec 2016 Apr 2017) Winter Visitors % Change Total Estimated Visitors 5,789,702 6,413, % Overnight Visitors 3,179,745 3,464, % Day Visitors 2,609,957 2,949, % Destination of overnight visitors 19% 21% 17% 15% 18% 16% 13% 13% 12% 17% 17% 17% 13% 13% 10% 10% 12% 12% 6% 7% 8% 4% 3% 6% Maine Beaches Downeast & Acadia Maine Lakes & Mountains Maine Highlands Mid Coast Portland/ Casco Bay Kennebec & Aroostook County Moose River Valley Source: DPA, Inc.

13 MAINE HOSPITALITY AT A GLANCE Properties by License Type lodging properties Number of Guest Rooms by Property Type 15,520 9,181 2,349 3,307 1, ,640 3,857 38,000 + guest rooms

14 Restaurants by License Type ,983 Eating Establishments Number of Seats by Restaurant Type 144,875 35,373 27,630 12,631 48,808 6,007 3,720 55, ,000 + Seats Source: Maine Health Inspections Program Licensing List

15 Maine Taxable Sales Restaurant & Lodging $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec : September restaurant revenue +1.2% September lodging revenue.03% Restaurant revenue through September +3.3% Lodging revenue through September +6.9%

16 Current Trends Increased number of lodging properties targeting millennials Millennials are anticipated to represent half of all travelers by New technology continuing to emerge Most guests are tech savvy today and there is a significant increase in the use of apps and mobile websites A trend towards showcasing local products and artists Hotels marketing efforts are aimed to providing guests with a regional or local experience that is unique. More artists and craftsmen are being utilized for this purpose.

17 Labor Shortages Maine has seen a palpable labor shortage that continues to worsen Cuts in H 2B and J1 foreign workers New workforce development programs in high schools and community college systems Worker housing issues Minimum wage/tip credit

18 Another hot(el) topic in Maine o o o o Collection of 9% lodging tax Non owner occupied short term rentals (STRs) Proposed legislation o Legislative Document No. 1721, H.P 1201 o An Act To Require Room Remarketers and Operators of Transient Rental Platforms To Be Registered for the Collection and Reporting of Sales Taxes Increase in city ordinances: o o Portland Hosts required to register short term rentals with the city Fees per unit Fines for failure to register Cap of 300 non owner occupied units South Portland, Rockland, Camden, Bar Harbor 3,700 Active Hosts 2016 Stats 174,000 Visitors $26 Million in Revenue 7,700 Current Active Listings airbnb hosts made 26 million in 2016 lepage and towns want a better way to tax it/

19 Slide 18 DP1 An 'active listing' is any listing which received at least one booking in the previous month. Daigle Properties, 12/12/2017

20 2018 Trends Renovations, Renovations The hotel industry will see an influx of renovations to improve the properties appeal as reviews and social media are more prevalent than ever. Co Work and life space Millennials still looking for a sense of community when traveling Business travelers will utilize co working spaces within hotels Continuing trend to shift away from guest rooms to public common spaces Bigger emphasis on the lobby and surrounding areas to improve first impressions

21 Portland Market T 12 November 2017 Change from 2016 Occupancy 64.4% 1.6% ADR $ % RevPAR $ % Source: STR Portland has been recognized in national publications as an emerging foodie destination. 5 star restaurants and craft breweries Cultural attractions (history, arts, entertainment) strong demand generators Growth in business travel Multi property owners seeking opportunities to gain entry to this thriving market.

22 Augusta/Maine South T 12 November 2017 Change from 2016 Occupancy 56.4% 2.2% ADR $ % RevPAR $ % Source: STR Downtown Augusta experiencing a revitalization Maine beaches continue to draw tourists from New England, the mid Atlantic, and Canada Expanding seasonality in the southern beaches areas

23 Source: STR Bangor/Maine North T 12 November 2017 Change from 2016 Occupancy 59% 1.5% ADR $ % RevPAR $ % Darling s Waterfront Pavilion concerts recently signed and extended their contract for 10 more years. Revitalization of downtown Bangor Emergence of the Cross Insurance Center University of Maine growth Increased efforts to boost the outdoor recreation industry

24 Mid coast & Bar Harbor Market Bar Harbor 2689 Rockport Lincolnville Rockland Camden Lodging Rooms Jackson Lab expansion Bar Harbor/Ellsworth Revitalization of downtown Rockland along with Camden/Rockport continues to attract new visitors to the area Foodie scene becoming more prevalent Cruise ship growth in Rockland and Bar Harbor

25 Notable Transactions of 2017 SHORT SALE Residence Inn, Portland $55,750, rooms $311,453/key Holliday Fenoglio Fowler (HFF) Holiday Inn, Bangor $8,000, rooms

26 Boothbay Harbor Oceanside Golf Resort, Boothbay Harbor $3,750, rooms (now 75) Estimated $10m in renovations Bruce Tindal Tindal & Callahan Ramada Hotel & Conference Center, Lewiston $4,300, rooms Mitchell Muroff Daigle Commercial Group Yachtsman Hotel & Marina Club, Kennebunkport Undisclosed Price 30 rooms 50 Slip Marina Roger Daigle Daigle Commercial Group Ocean Gate Resort, Southport Island $5,000, rooms Nicholas Farrell Daigle Commercial Group

27 USA Inn, Wells $4,100, rooms John Gendron Gendron Commercial Beau Rivage Motel, Old Orchard Beach $3,720, rooms Roger Daigle Daigle Commercial Group The ViewPoint Hotel, York $3,000,000 9 rooms Inn on the Blues, York Beach $2,600,000 5 rooms Anne Erwin Sotheby s International Realty

28 SHORT Oakland Seashore Motel & Cabins, Rockland $2,500, rooms Scott Horty Camden Real Estate Company Ullikana Bed & Breakfast, Bar Harbor $2,150, rooms The Swan Agency Sotheby s International Chalet Moosehead Lakefront Motel, Greenville $1,900, rooms The B&B Team 28 Mile Rd, Wells $940,000 and the purchaser plans to develop a 60 unit hotel and restaurant Mike Anderson Malone Commercial Brokers

29 Coachman Inn, Kittery $3,000, rooms Nicholas Farrell Daigle Commercial Group Bradley Inn, New Harbor $2,125, rooms Rick Wolf The B&B Team Lakewood Sporting Camps, Rangeley Undisclosed Price Dennis Wheelock & Scott Balfour Magnusson Balfour Glenmoor by the Sea, Lincolnville $1,975, rooms Dana Moos The B&B Team

30 New Product Property Name Location Rooms Type Opening Date Hampton Inn I 95 Exit, Kennebunk 73 Midscale October Tru by Hilton Maine Mall Rd, South Portland 98 Midscale December Oxford Casino Hotel 152 Main Street, Oxford 107 Upscale November The Francis East End, Portland 15 Boutique September Development Pipeline Property Location Rooms Type Status AC Hotel Portland Fore Street, Portland 150 Upscale Under Construction Home2 Suites Maine Mall Rd, South Portland 110 Upper Midscale Under Construction TBD Downtown, Waterville 42 Boutique Planning TBD West Elm Eastern Waterfront, Portland 150 Boutique Planning TBD 203 Fore Street, Portland 128 Upscale Proposed TBD Commercial Street, Portland 139 Unknown Planning Best Western Plus Route 2, Rumford 60 Midscale Planning TBD 28 Mile Rd, Wells 60 Full service Proposed TBD Thompson s Point, Portland 148 Upscale Planning TBD Eastport 26 Unknown Planning TBD Saco Island Boutique Proposed

31 Outlook 2018 ADR will see increase of 2% 3% RevPAR growth of 2 3% New Supply will keep occupancy flat Continued increase of tourists visiting Maine in the winter Continuing challenges in hospitality worker hiring Growth of short term rentals

32 Thank you!